tv Closing Bell CNBC November 8, 2019 3:00pm-5:00pm EST
and toronto, kicking it off. my neighbor, don garber, good to see you again, my friend >> great to see you guys, too. >> fantastic >> going to be a great game on sunday >> should be cool. >> thank you for watching "power lunch. have a terrific weekend. >> why would you watch the jets versus the giants when you can watch -- >> heartbreak, right >> "closing bell" starts right now. >> a little bit of soccer on cnbc i like that. "closing bell" is starting right now and we've got 59 minutes left to trade. i'm here at the gap post today that stock sinking after the surprise news that the ceo is leaving. we'll be discussing that story coming up. as for the broader markets, nasdaq just about set for a record all-time closing high the dow and s&p, though, set to miss out as things stand >> and i'm morgan brennan in for sara eisen let's look at what is driving the action on this friday afternoon. president trump telling reporters he has not agreed to roll back tariffs yet, as part of a phase i deal with china more evidence of consumer strengths today as an early read on sentiment came in ahead of expectations and disney leading the dow today
after reporting better than expected earnings ahead of the launch of its streaming service next week. and we have a big interview coming up in just a few minutes. billionaire investor leon cooperman says he will support fellow billionaire michael bloomberg if he runs for president. cooperman joins me exclusively to explain why joining us for the hour is mark tepper from strategic wealth partners mark, great to have me here. >> thanks for having me, appreciate it. >> what is your take on the market we saw record highs this week, but seem to be moving sideways here today >> yeah, so, overall, investors are definitely risk-on right now, because of this trade optimism i know trump said today that maybe there has been no agreement with regard to rollbacks and tariffs. but nonetheless, risk is on. and we're seeing this rotation now out of bonds, into stocks. we're seeing a rotation out of defensives, which had been leading the market into cyclicals. and really, one of the biggest driving forces right now is the fact that we are in this sweet spot when it comes to what the fed is doing so this mid-cycle adjustment, which is typically three to four
rate cuts. when you have three to four rate cuts, forward s&p 500 returns over the next 120 days, historically, are up 14% when you have more than four rate cuts, that would imply you're in a recessionary scenario we are in a sweet spot right now. it's a good time to be invested in equities. >> although that means one more rate cut, and suddenly it means recession. >> three to four we've got a little wiggle room >> first of all, let's focus in on the big stories we're watching today kayla tausche is watching the latest developments on the china trade negotiations julia boorstin is covering disney mike santoli has his market dashboard. but kayla, let's start with you. >> wilfred, a week away from when the white house wants to sign this phase i china deal and tariffs have been a persistent sticking point china said and u.s. officials confirmed that there had been an agreement on a scheduled rollback of tariffs. but today president trump said not so fast. >> well, they would like to have a rollback i haven't agreed to anything
china would like to get somewhat of a rollback. not a complete rollback, because they know i won't do it. but we're getting along very well with china. they want to make a deal frankly, they want to make a deal a lot more than i do. i'm very happy right now we're taking in billions of dollars. i'm very happy >> so president trump holding his support out until the 11th hour, but after the two sides agree on those tariffs, that is when they will discuss where to sign a deal, which has been the subject of much speculation. morgan and wilf. >> the fact that the apex summit is not going ahead, does that allow them a little bit more wiggle room, a little more time to make sure they iron out the remaining disagreements were orr do you think it's removed the countdown clock and allowing this to drag out almost indefinitely >> i think there is a sigh of relief that they don't necessarily have to reach a deal by next week, but they're still trying to keep that deadline in
place. that being said, there is quite a packed congressional calendar in the next few weeks and there is some worry that if you wait until a potentially rescheduled apec in january, as has been reported, those intervening weeks could prevent some unnecessary risk to the deal if you wait that long >> the disney beating expectations on the top and bottom line on the success of the parks division as well as its movie studio the big news was about disney's digital investments putting fx shows and new fx originals on to hulu also announcing that espn plus has added over a million subscribers over the course of the quarter. and announcing new distribution for disney plus, now through amazon iger saying he's bullish ahead
of the app's launch on tuesday >> well, it's ready to go, i'm glad to say. we tested it in the netherlands and we'll be talking about that a bit on our call and it was quite successful the product in the netherlands did not have original content, but it was extremely well received, not just in terms of the number of subscribers, but the user reaction to it. you know, very, very navigable, meaning easy to use, elegant you know, great access to our brands and our story telling >> iger is saying the traditional tv bundle is still very important to disney as well as other media companies, but they do believe that cord cutting will continue, which is what makes these big bets on digital all the more important back over to you >> julia boorstin, thank you mark, i bet you're happy stock's up 3.5% today, you own it, right? >> i own it. very, very happy and when you think about it, this quarter was a non-event quarter. it's fantastic that the stock is rallying next quarter is the show-me quarter, right the next quarter is where you start to find out more about disney plus subscribers. but when you look, you know, really understood the hood at what's happening, you know, espn
plus is doing well, hulu is doing well, hulu live tv is something that's an underaappreciated asset, right as more and more people cut their cable tv subscriptions, they might still want to watch a live sports game there's a lot going on their studio is up 52% year over year, because they continue to drive awesome content. >> here's my -- the question i keep returning back to yes, i realize they're launching this streaming service and they're now going to have three streaming platforms. this is the future, et cetera. but it's going to take a while for that to take root can to have a material effect for disney at what point does it change the valuation metrics, if at all >> this stock was trading at about 115 bucks. as soon as disney plus was announced, it went up to like 132 bucks next day then from there in april, it's traded pretty much sideways until this earnings call and now we're back up somewhere in the $140 range it is time for them to execute
on disney plus if they fail to execute on disney plus next quarter, then you might see that re-rated lower again. >> let's get over to mike for today's market dashboard >> hey, mike >> hello, wilf here's what we've got for you. investors seeking cheap thrills or at least thrills in the form of cheap stocks. take a look at the value trade on the ascendants, straddling the gap. it sounds risky, but this is the gap between stock and bond valuation, so maybe not so much. taunting the bear, a look at risk appetites and how they've changed. people wondering why they were so afraid of the bearish scenario in august already and summoning the nerve to buy one of the most beaten down, neglected groups that has not yet benefited from the value trade. first of all, here's a look at the performance of the s&p 500 value versus growth, exchange-traded funds, tracking the value and growth index what you see here in white is value, and it was also underperforming through the summer and we've just nosed ahead right here officially, value is outperforming growth on a
year-to-date basis go back farther, that's not been the case this is still a catch-up move and something a lot of wall street's been calling for for some time. a rotation out of defensives into cyclicals and values. but as we get more confidence in the cyclical trade and traction in value, know what you own. so here are the biggest five holdings in this s&p 500 value index. apple, 9%. is that what people think about when they say, i want to buy cheap out of favor stocks? not so much. jpmorgan, the most expensive large bank stocks. united health, it's maybe value, but not cyclical i think there's a definition issue here when we talk about the value trade or the cyclical trade. it's not all the same thing, guys >> mike, i guess, long-term, traditionally, you would expect value to outperform, when there are pullbacks, to pull back less than what has been outperforming on the way up. that's not really how that's playing out at the moment. >> no. i mean, value, really all it
does tell you is that these are the less-expensive stocks based on some metric it isn't always the same as defensive, ones that hold up better, when the market does pull back. so because you often in value have a lot of groups that are just deeply out of favor, like retail, like energy, it's not always the case and it's just a matter of them playing defense in pullbacks it's really just, over time, if valuations revert to the mean, you have a tail wind behind you there. >> all right, mike stay with us because we're going to keep talking to you about this. not the only one discussing value right now. bank of america's out with a new note saying, quote, value has never been this cheap. and aqr's cliff asnes in a sentiment in a note yesterday saying, quote, it is indeed time to sin a little and up the value weight somewhat. factor timing is an ugly thing, but i think it's about time we did some for more on the value play, let's bring in bespoke investment cofounder, paul hickey, also here at post 9. paul, great to have you.
>> good to be here >> how much of this value debate hinges on interest rates right now? >> i think a lot of it is where do you think interest rates are going from here? if you think interest rates are going higher on economic growth, these value stocks should continue to do better, but to mike's point, what he was saying in the prior segment, what exactly is value you ask 100 different investors, you're going to get a different -- >> is apple value? >> i think apple -- we look at value as trading relative to the market, and apple is actually moving more towards a market multiple or even a little bit more expensive in the market so i wouldn't necessarily say is that that's a real value stock it doesn't mean we don't like the stock, but beauty is in the eye of the beholder here but what's really interesting is about, we're seeing all of these in the last couple of days, calls for getting into value here over the last 50 trading days, value has outperformed by 700 basis points outperformed growth it's the widest 50-day outperformance of value versus growth since the 2016 election so right now in the short-term,
these value stocks are very extended and if you saw what happened after the 2016 election, all of these stocks have going to start doing really well. so i think a little bit of value, you know, you can take it, you have to have a balanced approach as an investor, but i think to go a wholesale shift, be careful at this point >> paul, which sector stands out for you in the value kind of mold >> i think the top holdings of the value index, the financials. the financials, you know, it's been all tech, all the time for the last several years this earnings season, we've seen financials really start to break out here and i think the backdrop, if you're going to see getting back to that point of higher interest rates, that's going to be good for the financials and these companies like goldman sachs pays almost 2.5% yield they're going to be able to raise their dividend going forward and they have exposure to the consumer sector through the markets and the apple card so i think there's a lot of -- i think a stock like goldman is
attractive here, and even bank of america is a name that really broke out after earnings and i think there's a lot of runway left for that stock. >> how do you think about the value discussion here? >> i guess we would probably take the hybrid approach so our investment strategy is garp, growth at a reasonable price, right so we do like companies that are growing their earnings, but at the same point in time, that valuation is important so on that value list that we just looked at, we own apple, we own jpmorgan, we own cvs, which in our opinion is the same exact company trading at 30 to 40% valuation discount for us, we do want the growth, but don't want to overpay for the growth >> mike, is there an argument that the best value at the moment comes from overseas, from europe or does that not really come into the sort of investor mind-set when they're allocating resources in the same kind of way? >> i do think valuation is one of the key attributes that would lead you overseas right now. but the thing is, it has been that case for a while and it's only recently that that trade
has begun to work. why? because global yields have lifted it looks as if the global industrial cycle has turned for the better after a pretty rough soft patch so, yes, i do think if you are a pure-value investor with a very strict discipline on what you're going to pay per dollar of global earnings, you would be more overseas than not i also think, you know, it should probably go without saying that none of this has to be either/or, zero sum game. i do think one of the key things people have the observation about in the summer is that very defensive, low-growth companies trading at very high premiums, because they had a dividend yield and stable businesses, liking consumer staples, that didn't make sense to people on a fundamental basis. but if you wanted to talk about facebook or microsoft is a decent stock to own here because of long-term trends, they're not cheap, but they can still perform, even if the economy is good >> paul, quickly, final word, thoughts >> i think at this point here, you know, for the market overall, you know, we're viewing
it is that the fed is basically the chaperones and they've said, we're leaving right now. you know, go have fun. and it's given the market a license to rally for the remainder of the year here because they're not hiking rates until they said inflation gets above target so i think that is really bodes well for the market. and it always doesn't end well, but enjoy it while it lasts. >> paul, thanks for joining us great to see you, as always. mike, we'll see you again shortly. still ahead, twitter in hot water earlier this week after two former employees were charged with spying for saudi arabia, but some experts say different social media platform could be an even bigger risk we'll explain, ahead plus, president trump weighing in on the latest potential entrance in the democratic race. >> i know michael bloomberg fairly well. not too well fairly well. well enough. he will not do very well and if he did, i would be happy. there is nobody i would rather run against than michael >> we'll take a closer look at what a bloomberg candidacy might look like. and we'll speak with leon
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higher today after posting a earnings and revenue beat yesterday. the company noted record app traffic and raised its full-year guidance and as you can see right there, that stock is up 12% right now. do you own zillow? >> no. no, no, no i don't if you consider zillow to be more of a real estate stock or a tech stock. it's not one that we own our real estate play, our home play right now, is kind of unique it's sherwin williams, right so if you think about it, what is the most cost-effective way to makeover your home and make it look completely different paint, right so that's why we like sherwin williams the consumer is strong, but the consumer is also very price conscious right now. and i think that's the best play right now if you're looking at real estate, homes, whatever we're talking about here >> we've got 41 -- 42 minutes left to trade there. s&p's gone positive, which would be enough for a record close if it stays there switching focus, billionaire businessman michael bloomberg reportedly taking steps towards launching a presidentialed by.
elizabeth warren taking a jab at bloomberg launching a calculator for the billionaires on her campaign website to calculate how much certain people would pay under her ultra-millionaire tax for buttons for bloomberg, bill gates, leon cooperman, to name a few let's bring in robert frank with more on what a bloomberg candidacy might look like. hey, robert. >> hey, wilf and what he would pay, by the way, bloomberg would pay $3 billion this year under the warren wealth tax, which he says is unconstitutional and ineffective. but his more moderate economic positions on everything from taxes to market, education, and government regulation are balanced with strongly liberal views on the environment and guns now, at an event in new hampshire earlier this year, bloomberg said he favored more gradual change on taxes and health care. >> if you want to solve income inequality, one of the things you have to do is you have to adjust how progressive the tax rates are. to replace the entire private system, where companies provide
health care for their employees would bankrupt us for a very long time. it's just not a practical thing. >> now, mayor mike has given away over $8 billion to charity, focused mainly on gun control, climate change, education, and health care. guys, back to you. >> robert, there's so many questions to ask on this potential candidacy. the one that sticks in my mind is whether if he self-funded his campaign, that he has more than enough to kind of take on all of the other candidates combined with his financing the other question is, after the fact, if he were to win, am i not right in thinking that he would be able to sell his stake in his business tax-free that would almost pay back what he just invested in his campaign? >> i don't know that he could get away with it being tax free. there is that issue with administration officials where you have to sell something, you can defer those taxes, but i don't know that you could do that -- i suppose if you put
them into government bonds, eventually you would have to pay taxes on those but he has said in the past that if he becomes president, he would most likely sell his company, which is valued at somewhere between $40 billion and $50 billion. so that would be a big sale either way, whether it's tax free or not. >> all right robert frank thank you. >> thank you, guys after the break, the fright before christmas morgan stanley says retailers could face big headwinds this holiday season we'll explain, next. and later, leon cooperman getting emotional this week when talking about his spat with elizabeth warren and the 2020 election >> i mean, i think, these people cannot only see the emotion on your face, but hear it in your voice when you talk about this, lee. why? >> i care. that's it. >> coming up, we will speak with
cooperman exclusively about the latest back and forth with warren plus his support of presidential run by fellow billionaire, michael bloomberg we're back in a couple of minutes. employees need more than just a paycheck. you definitely want to take advantage of all the benefits you can get. 2/3 of employees said that the workplace is an important source for personal savings and protection solutions. the workplace should be a source of financial security. keeping your people happy is what keeps your people. that's financial wellness. put your employees on a path to financial wellness with prudential. itso chantix can help you quit slow turkey. along with support, chantix is proven to help you quit. with chantix you can keep smoking at first and ease into quitting. chantix reduces the urge so when the day arrives, you'll be more ready to kiss cigarettes goodbye.
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even if sometimes we're not. sundown vitamins. all clean. all the time. welcome back we've got some news on mcdonald's kate rogers has the details for us back at hq. >> hey, wilf we're getting more details on the relationship that ultimately led to the firing of former mcdonald's ceo steve easterbrook. this is dow jones citing sources familiar, reporting that the
mcdonald's board first learned of easterbrook's consensual relationship with a female employee about three weeks ago her identity was not disclosed in this article. it also went on to say that mcdonald's does have a long-standing policy against employees having relationships with both direct and indirect reports. it also says that years ago, easterbrook had a relationship with a pr staffer, who worked on goalen's mcdonald's account. this was before steve easterbrook was ceo. the board was made aware of the relationship, signed off on it under assurances that the woman would be taken off the mcdonald's account, which she ultimately was, to avoid that conflict of interest, and the article also says that when this current relationship rose to the board, it voted unanimously to fire mr. easterbrook after having several lengthy meetings and talking it over. mcdonald's stock is up fraction gn ally today >> mcdonald's pup 0.4% today. time to get word on the street
morgan stanley calling the 2019 holiday season the fright before christmas. the firm saying in a note that six fewer shopping days between thanksgiving and christmas along with a number of other factors like tariffs and colder weather will leave retailers on ice. the stock's best position to take advantage, offprice stores like burlington and specialty retailers like nike. >> i like how you said that word "special "speciality. >> how would you -- >> specialty >> this one i get wrong as well, susquehanna upgrading footlocker to buy saying that its special sales and allocations of jordan retroa retros and geyeezies -- >> i like the way you say it no murrah initiating coverage of offprice retailers citing autozone, lowe's, and walmart and initiating ulta had a sell due to slow industry-wide growth
in the near-term mark, when you look across the retail landscape right now, what do you like, especially as we go into the holiday season here >> yeah. if we go back to morgan stanley's comments about this possibly being a rough christmas season, i can go back maybe three, four weeks ago and walmart, one of the companies that's actually selling the christmas gifts, right, ceo was on cnbc and what he mentioned is that the two biggest predictors of the holiday shopping season are going to be unemployment, which is low, it's 3.6%, right we're at full employment and the second thing is gasoline prices and gasoline prices are at the same level today as they were a year ago on top of that, you throw in the wealth effect. the s&p 500 is probably 300 points higher today than it was 12 months ago. i think we are going to have a strong holiday season. who are my favorites as i said, the consumer's much more price conscious, so look at companies like t.j. maxx, right? >> we should mention, with 32 minutes left to trade, we are set for record-closing highs on
s&p and the nasdaq we've improved sentiment in the last 15 to 20 minutes. the dow is still negative, only fractionally, any positive close for the dow and s&p equates to a record close can the dow join the s&p and nasdaq in that territory we shall see over the next 32 minutes. still to come, the chief of staff to vice president mike pence will join us to talk china, trade, the fed and much more >> and here's a check on bonds u.s. treasury yields ticking higher once again today, building on yesterday's big spike. "closing bell" will be right back will it feel like the wheend of a journey?p working, or the beginning of something even better? when you prepare for retirement with pacific life, you can create a lifelong income... so you have the freedom to keep doing
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welcome back we've got 29 minutes left to trade. here are the key things driving the action president trump telling reporters he has not agreed to roll back tariffs yet, as part of a phase i deal with china an early read on consumer sentiment coming in ahead of expectations for november and disney leading the dow up nearly 4%, having reported better than expected earnings ahead of the launch of its streaming service next week. with 28 minutes left, we are
higher on the nasdaq and the s&p, not on the dow. time for a cnbc news update. >> hello, wilf hello, everyone. here's what's happening at this hour in a letter to house investigators, john bolton's lawyer says his client has knowledge of many relevant meetings and conversations connected to ukraine this according to "the new york times. his lawyer, charles cooper, wants the court to rule on whether bolton should testify. house democrats releasing alexander vindman's testimonyi the impeachment proceedings. vindman testifying there was no doubt president trump was asking for an investigation into the bidens from ukraine as a condition for president zlelensk to get a white house meeting with president trump the cdc says testing of lung fluid samples from vaping patients shows vitamin "e" acetate was found in all of them no other suspicious substances were detected besides from that vitamin "e" oil.
a cdc spokesman described the findings as a breakthrough and a statue of ronald reagan was unveiled on a site overlooking the location of his iconic speech, urging the soviet union to remove the berlin wall. and tomorrow marks the 30th anniversary of the fall of the wall you are up to date that's the news update this hour morgan, back to you. >> sue herrera, thank you. let's send it over now to mike santoli for his second dashboard. mike >> morgan, markets are straddling the gap between stock and bond valuations, actually helping to support bond valuations bond yields moving up has raised the question of at what level they might be a threat to the stock market it's probably going to be a w ways -- oh, that's the wrong one. we're going to do this first this is the absolute valuation, forward basis of the s&p 500 what you see here is, it is pretty much as high as it's been this entire cycle, except for this one bulge in 2017 and 2018, when the market was pricing in the huge windfall effect of the
tax cuts, but they were not yet in estimates so really on a like for like basis, it's almost as expensive as the market has been in a while. but now look at it compared to corporate bond yields, and you'll see there might be a little bit more of a cushion in blue here is the s&p 500 earnings yield that's earnings divided by price. this is the high grade, investment grade, corporate yield right there. the difference is charted on the bottom when it's green, that means that stocks seem relatively inexpensive versus bonds and when it's red, it's the opposite here's one thing to keep in mind during this entire cycle, it looks as if stocks have had the advantage, simply because yields have been very low on an absolute basis through the entire 90s, it looked like stocks were too expensive. so obviously, different eras have different regimes but right now it looks like there's a pretty decent cushion right here the lows of early 2018, in terms of that spread were when you had to worry so maybe right now, as long as corporate yields don't go up too much, equity valuations look okay >> mike, is earnings yield the best thing to compare this to? would it be better to be
dividend yield or perhaps somewhere in between cash back yield, buybacks plus dividends >> i think shareholder yield, which would be buybacks and dividends, would tell you a similar story. and i think that dividend yields, yeah, sure, it's useful, although it would probably have kept you out of the market for most of this bull market, simply because companies have oriented themselves away from heavy payouts of dividends on a percentage of earnings >> okay, mike, thank you very much for that. southwest pushing back the return of the boeing 737 max to its lineup phil lebeau has the details for us in chicago. phil >> wilf, not a huge surprise there's been growing speculation that southwest and other airlines that were planning to start flying the max again, commercially, in the first couple of months of next year, might have to push it back well, now southwest says it will file paperwork which pushes back the return of the max in its schedule until early march the delay, primarily dabecause they're not sure there's too much uncertainty about certification of the 737 max. when you look at three u.s. carriers and we have boeing's target on
the right there. southwest is furthest out. there you see american and united, expecting to fly it beginning in early january we should point out that boeing is sticking with its target to have certification by the end of the fourth quarter take a look at shares of southwest airlines we're going to show you a one-year chart here. but guys, what really stands out -- actually, we're not showing you a one-year chart what really stands out, guys, is that if you go back to this stock, back when the plane wuas first grounded in march, it's down about 28, 29% since then. meanwhile, if you take a look at shares of boeing, they maintain this plane will be certified by the end of the fourth quarter. that is their target but as we've talked about, they've got several steps that they need to clear before that happens. >> yeah. phil lebeau, with thank you. mark, i mean, back to phil's point right there, certification is basically just step one in this return to service process what do you think of shares of
boeing at this rate. >> look at how resilient this stock has been given all of these issues, the stock is down 5% year over year, i would say that's pretty good, right? there's a lot of talk right now about the ceo's job being in jeopardy i personally think he's safe while he may not have done a great job of managing this issue, he sure as heck has done a good job of managing the stock for all the stockholders, right? so as far as we're concerned, we own boeing, right? we like the stock, we like the company. yes, it's a big issue. and we're still just looking at this as a cash flow timing event. these cash flows will still be recorded and it's a cash flow machine. boeing's a great company >> so have you been or would you be buying on the dips? >> yes, we have been buying on the dips and we would continue to do so >> down 1.75% today. here's where we stand. we're higher on the s&p and on the nasdaq any positive close for the s&p and dow is another record. the dow just missing out, but fairly close, as you can see five basis points away up next, we've got your last
chance trade mark's looking at one stock that's nearing all-time high levels, itself >> plus, shares of gap are dropping on news that its ceo is stepping down. and elizabeth warren takin a jab at billion naaires as the wealth tax debate heats up >> you may have heard some billionaires on tv recently crying about that 2 cent wealth tax. ah ahh. but we ask the top 1/10 of 1% to pitch in 2 cents on their fortunes we can invest in an entire generation >> coming up, leon cooperman will join us exclusively to react to warren's comments and weigh in on why he would support fellow billionaire michael bloomberg if he runs for president in 2020. "closing bell" will be right back you should be mad your neighbor always wants to hang out.
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so as the last hour's momentum continues, we could have a triple record close. health care in the top sector followed by tech, energy, utilities at the bottom. >> with 18 minutes left to go, mark, what is your last-chance trade. >> my last-chance trade is broadcom the tech sector has been the best-performing sector so far this year, up about 40%. but the question is always, where do you want to be? do you want to be in semis, software well, why not get both so broadcom gives us semi exposure and after the symantec deal is done, they're going to be generating 30% of their revenues from software those are recurring revenues that's high margin and what that does is it reduces the cyclical nature of their business on the semi side, 5g rollout is happening and all of these 5g phones are going to require more radio frequency content. broadc broadcom's number one there. it's paying a 3.5% dividend yield. we think it's a great buy rate here >> you don't think this looks pricey >> i think there's 20% upside from here. i think this is undervalued compared to the rest of the semis.
i don't think the fact that they are shifting towards more software-based revenues, i don't think that's being fully appreciated in the stock right now. >> broadening out to other chip stocks, do you think that now's the time to be getting into some of them? >> i do. especially if they start to make more progress on the trade deal. they're definitely under pressure given all of the trade issues we've had over the course of the last year so as these pressures are alleviated, i think semis are a great spot to be >> all right we'll keep an eye on it. last chance trade, broadcom. this is the last commercial we're going to take before the close. we'll dive into the day's most important stories when we take you inside the market zone >> and after the bell, we'll head to the white house north lawn where we'll wrap up the latest developments in terms of china trade when we speak with marc short, vice president mike pence's chief of staff and tonight, be sure to catch a special veterans day edition of "mad money." jim's special salute to service kicks off at 6:00 p.m. eastern time you don't want to miss that.
and "closing bell," you don't want to miss that either back after this. so servicenow put your workflows in the cloud, huh? mm-hm. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you. ♪
♪ ♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg. >> announcer: the market zone is sponsored by e*trade. get $100 on us when you deposit $500 >> 13 minutes left in the trading day and the trading week, for that matter. the s&p is higher, poised for a record close the nasdaq is higher, the dow is slightly lower we are now in the "closing bell" market zone, commercial-free coverage of all the action going
into the close >> cnbc's senior markets commentator, mike santoli is here to break down these crucial moments of the trading day and today we've got mark tepper from strategic wealth partners, alongside us, as well. we should point out, the nasdaq also set for a record all-time closing high as well as the s&p with those 12 minutes left to trade. the dow needs to climb a further 17 points and it would be in record close territory, itself disney moving higher today after reporting a q4 earnings beat after the bell last night. the strong numbers come just ahead of the launch of disney plus on tuesday. joining an already-crowded landscape. ceo bob iger expressed confidence in disney plus, being able to stand out among other streaming services >> we're not focused that much on the competition we're focused on making sure that the product we're bringing out is both successful from a bottom line perspective, but also successful from a consumer perspective. we've got something that's incredibly unique. i talk about it a lot, because of those brands, disney and pixar and marvel and "star wars" and "national geographic" and 30
seasons of "the simpsons," great library content, great original content under all of those brand banners. there's nothing like it. >> mike, what's the valuation multiple of disney relative to netflix and relative to cbs? >> to disney, it's -- so disney is about 25 times forward earnings right now so it's a premium to the market. now, a cbs is probably half that, at best. depending on what you think for earnings next year and netflix, of course, is probably double that, depending on what we're looking at in terms of the right frame for earnings so obviously, the market is giving disney a fair amount of credit up-front for being able to capture a good chunk of the new streaming market, having the weapons in terms of the content to do that inju i just think, also, it tells you how successfully the company has changed the conversation by buying fox and putting $70 billion of new assets in there, you shrink espn down as a percentage of the whole. the question is no longer how many monthly subs are you losing in basic cable, it is, how are are you going to own the future
of entertainment and evening that's benefitted the stock. >> mark, i know you're a shareholder in this name, the acquisition of the fox assets, looking like a good idea smart idea >> it's definitely some pressure, right? but at the same point in time, i think really the biggest thing i'm looking at right now is really the partnership with verizon gets them in 20 million householding right out of the gate for free. how many of those are they going to keep? maybe 10 million, 15 million i think that gives them a head start when it comes to accumulating some subscribers. they're targeting ten series and movies to kick things off and they'll be up to 45 by the end of year one. so i think it's looking pretty good, overall. >> shares to have gap under pressure, though, on news that ceo art peck is stepping down. courtney reagan has more on this >> so a number of analysts lowering expectations for gap's share price and financials in the week of, yes, that ceo dp departure. but also disappointing guidance. ceo art peck stepping down as
ceo of gap inc., but that's ahead of the old navy spinout, which is now in question by a number of analysts peck took over in 2016 at gap inc. brands really started to stumble. and he wasn't able to turn it around even the standout old navy has begun to see sales fall again here in the third quarter, as well so big questions really remain about the future of the company, whether it's with old navy or not. can the gap be fixed no one knows for sure. >> yeah. courtney raingeagan, thank mike santoli, the stock is down 35% year-to-date, it's down 40% over the past year and the shares are still under pressure today, even though the ceo has arguably not done the greatest job, at least from a stock standpoint >> right >> it's the market basically saying that this is almost kind of perpetual decline, in terms of revenues. you have a $6.5 billion market value, there are still 3,200 stores if you think of how small it is as a financial entity, there's
not that much debt it's super cheap on the numbers, but the market is saying, we don't care the company should have been taken private years ago and just kind of shrank out of the glare of the public markets, but they either couldn't or didn't want to do that >> do you want to touch this, mark >> not at all. this is a dinosaur that has not evolved, right this management change is long overdue. they are -- first of all, they're still mall based, right? and there's declining traffic walking into the malls, but beyond that, they have some company-specific issues, as well they are struggling to sell products at full price, they're struggling to attract millennials. they've got some easerious issus they need to fix before -- >> they attract me i still like their clothes >> i'm a big fan of the toddler line, i have to say. >> there is value there. it's just that they're in too many places. >> let's move on and talk about mcdonald's long beau research upgraded the stock to buy today and kate rogers has been diving into that >> wall street was mix this week over the sudden firing of mcdonald's ceo steve easterbrook and his replacement, but the
golden arches did get an upgrade this morning from longbow to a buy with a price target of $227. analyst alden stump said the firm was disappointed to hear of easterbrook's departure, but believes that they are in good hands with kempczinski, saying, since his promotion to president of mcdonald's in january 2017, mr. kempczinski has played an integral role. we should also note "the wall street journal" just said that they learned of easterbrook's consensual relationship with an employee some three weeks ago and voted unanimously to fire him. the company declined to comment to cnbc further on that. back over to you >> we still don't know the employee's identity and how direct a report, you know, she was to easterbrook >> that's right. details were starting to trickle out, but she was not identified in that article. they only said that she was a
employee, and once again, obviously, the relationship was consensual >> kate rogers, thanks mike santoli >> yeah, it's -- >> the more detail that comes out, i think the more confirmation that investors get that this was simply, you know, a strict policy decision it wasn't -- there's really nothing else going on that bears on the company the stock was already down off of its highs there was already this question of what their next act was in terms of kind of putting energy into the brand and the retail business so i think that's still the story and it's not really a trading based on what happened >> mark, any reason to think that the strategy at mcdonald's shifts now with somebody else at the helm >> i don't think so. you know, i think the main issue right now is, most of these fast food stocks, they came a long way in a very short period of time, as more and more people were flocking into that defensive trade. that defensive trade is kind of unwinding now, but to be honest with you, we don't any of those fast food stocks, but mcdonald's pulling back 12% or so, it's pretty interesting right here. >> all right
goldman sachs raising its price target on caterpillar and seema mody has the details on this for us >> that's right. wall street is starting to warm up to cart pillar. on wednesday, it was bank of america and today goldman sachs raising its price target on cart pillar to $156 from $130 but maintaining its neutral rating this is a stock that has gained about 25% in the past month. while the fundamental story has remained weak, remember, disappointing earnings in the third quarter from cart pillar the trade story and the narrative has certainly improved analysts say they have improved visibility, and that positions the industrial bellwether to possibly benefit from a late 2020 recovery, but that really hinges on whether progress continues to be made on the trade front and further tariffs are eased. we're looking at the stock trading around $148, which is right in striking distance of its 52-week high guys, back to you. >> seema mody, thanks.
this goes back to what we were talking about at the start of the hour, cyclicals. >> all of a sudden the money is rotating out of defensive, back into cyclicals one of the main reasons -- ca e caterpillar was right in the crosshairs of the trade war. as we see these trade tensions kind of reduced further and further, i think caterpillar could continue to go up. >> industrials clearly having a nice bounce. why aren't sectors like energy taking part in that if it's because of renewed optimism on trade? >> it's definitely a good question energy, obviously, by definition, is a commodity i think it's harder to get excited about the individual corporate stories and their ability to have earnings estimates go up next year if they simply execute in a growing economy. energy companies are -- you know, they're passive. they're not necessarily going to be able to capitalize on -- i think industrials have -- they kind of have the hearts of investors already, because people like the industrial conglomerates, they like the aerospace cycle, they like just in general the capital spending
story, and i think that kbi distinguishes them from something like energy. >> we've got just over three minutes left to trade and are set for record all-time highs on the s&p and nasdaq the dow is lower by just five basis points anything positive would be a record all-time closing high for the dow also mike's been having a look at the market internals mike, what stands out? >> it's been mixed we look at the advancers and decliners in the new york stock exchange it's been around the break-even mark all day it's right now slightly to the positive here. this has been one of the real supports of the market, people saying, look, cumulative breath in the market. advancers versus decliners made pan all-time high. but it has stalled out in the last few days. the market seems a little bit fatigued they don't want to look at the volatility index, as well, on a year-to-date basis they're seeing it click down right toward 12. it's pretty much at or near the year's lows. 12 is really is that separation between normal neutral conditions and very sleepy and one where the market is not
prepared to absorb some kind of a shock. but it also does reflect the action itself. it's been a flattish market near all-time highs >> all right we've got two minutes left to go let's send it over to rick santelli for a check on bonds. rick >> it's been a huge week in stocks, dollars, and bonds look at a two-day chart of ten-year note yields 187 intraday high for the week but we're darned close at 193, we're up, open the chart up this is a big day and week, because we've taken out those september 13th highs, both in 10s and 30s. final, the dollar index drops 2% in october this is the first week in november, it's head up half of that at 1% and bertha, not only a record close, sixth week in a row for big nasdaq, higher closes. what's going on? >> and a lot of that has been driven by chips, which are the best performing sectors this week qualcomm, one of the poster children there one of the big chip companies that posted strong earnings.
we also had veco and great results from synaptic. in biotech, we're also seeing a big recovery this has been the beaten down sector, up for six straight weeks, as well regeneron, one of the poster children there one of the best performers after a really stropg beng beat in its earnings expedia is the online travel firms are seeing a lot of competition and having to spend a lot more to get customers. bob? over to you. >> and we had a rally going into the close, bertha. we moved about ten points on the s&p 500 in the last hour or so and we were led by two important groups, health care and technology stocks. there's the s&p. we're going to close at a new high right now, but health care and technology stocks, great today. cardinal health, for example, cigna, also strong in the health care group nice move up there, about 1.5% for cigna today. we also had some nice moves up in some of the technology names, as bertha noted going into the
close. xlk, which is the big etf for technology, that's closing at a new high there's the closing bell, the dow has been trying to get into positive territory other than a brief moment after the open, it hasn't been there we'll see if we can get there right now. it's closing down three points, no, just went positive there's the dow jones industrial average going into the close, s&p up 7 another record for the s&p >> welcome to the "closing bell," everyone. i'm wilfred frost. >> and i'm sarah brmorgan brenno sara eisen zplp t >> the dow just eking out one basis points worth of gains right at the close, taking it into positive territory for the day and following yesterday's
record close that is, of course, another record for the dow the russell up a decent third of 1%, but still about 14 or 15 points away from its own record. >> the dow transports if i we sd slightly lower all of the major averages finishing the week in the green. coming up, our exclusive interview with omega family office chairman and ceo, leon cooperman. he's here to tell us why he would back fellow billionaire michael bloomberg if he runs for president in 2020. must-watch tv. joining us, in the meantime, though, to talk about the market day is mark tepper from strategic wealth partners is still with us. also joining in, barry nap from ironside's macro economics but mike santoli, first, let's start with you we finish the week with new records again. >> yes so a fifth straight up week. and the whole thing has been a process of removing all the reasons you had to worry or people had to worry in august and september. if you were worried about a recession seems imminent, the
data has not cooperated with that consumer's fine, employment's fine if you were worried about tin votered yield curve, that's been corrected. yields are up off the lows i think it has been mostly about relief replacing fear. the question is from here on out, tactically, can we go straight up from these levels? it's probably not likely, but i do think seasonal factors are now favorable and credit markets are fine so it's pretty tough to find a reason to point to the market and say, it kind of doesn't deserve to be here, even if, in fact, there's not an immediate first -- >> a big move this week as well in yields. what do you make of that move that we've seen and what does it mean for stocks? >> so my perspective on this, and actually, i was down here when we were at the denumon of the inversion. and my thesis around it then is it was not forecasting a u.s. recession, it was reflecting global manufacturing and global trade recession. so the disinversion now is
reflecting a recovery in global trade, which is evident in some of the data, as well for example, last night's chinese trade data disregarded the export piece their ordinary imports, which is how much they take out of the rest of the world. when the chinese heavy industry sector collapsed back in '14 through '16, that went from plus 15% to minus 20. this time, it troughed at minus 8 in and around july it's only falling at a 2% annualized rate. you're seeing decent upward momentum and lots of indications that global trade is starting to pick up even in the u.s., right, our ism report a week ago, the market optimismly fe officially fell off. furthermore, all of the equity markets are pointing at a recovery in global trade you guys were talking about cat right before i got here. morgan, you pointed out that transports have gone to a 52-week high all of these things are really pointing towards a global -- a
recovery in global trade and manufacturing, and that to me is what the yield curve is really saying right now and i agree with mike. we're right into a very favorable seasonal period. this should extend right through the end of the year. that's how i would be thinking about that >> mark, your take on yields and what it means? >> so very, very bullish right now. when you look at how steep the yield curve is, it's probably about as steep as it's been all year and the thing that really stands out to me. when the yield curve became disinverted, uninverted, whatever you call it, right, initially it was because of a bear steepner. it was the short end of the curve dropping, right? but now what we're seeing is more of a bull steepner, which is the long end of the curve going up, which is good, and that's bullish for stocks. >> while the markets have been hitting record highs, some stocks have been left out of the rally, namely some recent ipos on the week, uber is down 13%, luxury consignment retailer the real real down 25% and revolve
down 22% mike, is this some stock-specific stories, but any stock with a valuation multiple that doesn't really exist or is negative earnings and is getting slammed? >> the market has lost its appetite for buying these stories that really have no visibility to when they're going to be profitable feeling as if the public investor was kind of meant to hold the bag for private investment i don't think that any one of them has necessarily abandoned at these levels or anything like that, but it shows you yet another thing that many people thought might sink the market, which is the supply of new unicorn ipos, which is somehow going to throw off the supply and demand of the overall market, or that refusal of the market to buy into these means risk appetites would be going away >> barry, when you see names like this, many of them high growth, no profits, even though some of these names, uber, for example, have laid out a path to profitability over the coming
years, when you see them continuing to come under pressure, do you think it's a sign that investors are becoming more discerning about where they're putting their money in this market? >> >> i just think that the theme right now is you know, reflation, the recovery in global trade, and underneath all of that is a real surge in intellectual property investment but more on the enterprise level. so, the best number for me, not this week, but the week before was, from the gdp report, the fact that research and development spending picked back up, that software investment picked back up in the third quarter. my bottom's up estimates have s&p capex actually turning significantly higher from here and research and development spending, strongs it's been at any point in the last three business cycles, so i think that if you're thinking about tech at this point, you should be much more focused on enterprise tech than some of these consumer stories that aren't even in some cases technology companies is uber a technology company or
really sophisticated cab company? you know that's how i'd be doing at that. >> that does seem to be a lot of the debate here. everybody, stay with us. we're going to get over to bob pisani for a look at stocks in the winner's circle this week. >> we're at a new high in the s&p, but the big high for everybody was that are 20 basis point move in the ten-year yield, that caused some very significant rotation, even beyond and above the cyclical rotation we've been seeing homebuilders suffering with the higher yields. utilities, also. this caused a real little modest earthquake in the starkt is it going to continue this yield rally? he says a higher ten-year yield.
my vote pb stock of the week, believe it or not, general election, a new high again today. this stock has been on fire since the overall earnings came out here best eight-day performance in ten years, up 26% guys, in the last eight days. amazing new high for ge. >> bob, thanks very much for that after the break, we'll speak with vice president pence's chief of staff, marc short, about china trade negotiations, the economy, and much more >> and here's what else is on deck >> coming up, billionaire investor leon cooperman getting emotional this week talking about the 2020 race. >> i care. that's it. >> and elizabeth warren apparently noticed >> you may have heard some billionaires on tv recently crying about that 2 cent wealth
tax. ahh. >> now, cooperman says he'd support fellow billionaire michael bloomberg's potential n president. he'll tell us why exclusively in he'll tell us why exclusively in 90 seconds well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade keep going, keep going. [maniacal laughter]
gold! right, uh...thank you, for that, bob. but i think it's time we go with gbtc. it's bitcoin exposure through a traditional investment account. nice rock. it's time to drop gold. go digital. go grayscale. china would like to get somewhat of a rollback, not a complete rollback, because they know i won't do it but we're getting along very well with china. they want to make a deal frankly, they want to make a deal a lot more than i do. i'm very happy right now
we're taking in billions of dollars. i'm very happy >> that was president trump earlier today telling reporters he has not agreed to roll back on tariffs on chinese goods. joining us right now to talk more about the latest in china trade negotiations, marc short, chief of staff to vice president mike pence good afternoon to you, marc. thanks so much for joining us. >> wilf, thanks for having me on >> what's your take on this? does phase i have to be signed before there can be any other rollback >> i think the president has been clear that he's not advocating yet rolling back tariffs, but i think it's important to note that he did agree to delay the current or the announced increase in tariffs, as these round one negotiations go on and the feedback that we get from secretary mnuchin and ambassador lighthizer is productive negotiations. so i would -- we're very optimistic that round one will be completed and hopefully signed before the end of this year >> in terms of that timeline,
marc, you've got another trench of tariffs that's expected to go into place on december 15th. is that the timeline we're working with right now >> morgan, i think that that is likely within that timeline. i don't want to try to tie mnuchin and lighthizer's hands to a specific deadline, because i don't think there is one but the september 15/october 15th round that was delayed continues to be in advance and i would expect as we approach october 15th, that everything before there is locked up. >> would it be fair to say that your boss has a tougher view, a tougher stance on china than perhaps the president does today. maybe they were seeing eye-to-eye originally, but with the president slightening softening his position, is the vice president's view tougher now? >> no, wilf. i think that they're pretty much in lockstep. i think that it's hard to find an administration that has reset the relationship better than this administration has. i think for the last few decades, ever since china was allowed in the world trade organization, there was a hope
and a belief that other freedoms would follow and we haven't seen that in china. we haven't seen a discontinuation of the human rights abuses, the persecution of religious freedom we've continued to see intellectual property theft and we've continue to see them operating in the way that the communist party of china always operated but if you actually look at the vice president's remarks, he went through this very carefully with the president we highlighted all of those abuses, but the vice president very clearly said, for those of you who think we're trying to decouple from china, absolutely not. we're looking to negotiate with china. we're looking to work with china. but it means we also have a realistic view of what the future holds and it's not a naive notion that if you just allow more trade and you allow them in the world trade organization, that all of a sudden china will change we haven't seen that in 25 years. and instead, they've become a greater national security threat to the united states and this administration has very clear idea on that >> i guess, then, my question mark is whether this is a
strategic decision by the vice president and the president to play kind of good cop/bad cop, because that speech you mentioned on october 24 by the vice president was very, very tough on china it led to a very fierce response from a foreign ministry spokesperson for the chinese, saying it exuded sheerary gans and hypocrisy and was packed with political prejudice and lies china expresses its indignation to that speech i expect one wouldn't want to elicit that response from a chinese official at the same time you're trying to get the ink dry on a trade deal. >> we're pleased that the folks in china were able to lead and listen to the vice president's speech i think the vice president gave a speech a year ago with the hudson institute in which he gave similar remarks and we just hope the people of china get to read the speech, because there they don't enjoy the same freedoms of speech. and i think that the vice president is very encouraging that we want to have a relationship with the people of
china. unfortunately, it's their government that's had such a repressive regime. and i think that's been the position of this entire administration it doesn't mean, as i said, that we can't strike trade deals. and i think that the president has been very clear about looking at factories across the country that have been shut down because of unfair trade deals and wanting to basically start a new chapter. in what our trade negotiations are. and i think he's been a successful at basically starting over again and we look forward to more productive relationship moving forward this, as you said, would be phase i. the more, i think structure reforms will be in the future. >> mark. i want to shift gears a little bit, because a country like china, certainly, there's this expectation now based on history that there's going to be things like censorship, espionage, et cetera but given the news we got this week about former twitter employees charged with spying for saudi arabia and digging into the accounts of kingdom critics, saudi arabia is such a
key ally in the middle east for the u.s. how do you think the u.s. and american companies should be responding to a situation like this >> well, i think that, unfortunately, a lot of countries don't enjoy the same freedoms we do in the united states and we hope that american companies are exporting the same ideals that we hold so dear here in america and whether that's saudi arabia or china or others, you're right that saudi arabia is a strategic partner in the middle east and has been an ally against countries that i think pose a serious threat to the united states like iran but it doesn't mean that we turn a blind eye to human rights abuses >> all right marc short, thanks for joining us today >> thank y'all for having me on. omega family office ceo leon cooperman telling cnbc that he would back former new york mayor michael bloomberg if he decides to toss his hat into the democratic presidential primary. cooperman saying that he's a, quote, huge fan of michael and unless he changes his stripes,
he will have my unequivocal support. >> his comments come after back and forth comments between him and elizabeth warren >> if elizabeth warren is elected president in my opinion, the market drops 25% >> all we're saying is if you make it big, i mean, really big, i mean, 1/10th of 1% big, pitch in 2 cents so everybody else gets a chance to make it >> the vilification of billionaires no sense to me. >> i think these people cannot only see the emotion on your face, but hear it in your voice when you talk about this, lee. why? >> i care. that's it. >> you may have heard some billionaires on tv recently crying about that 2 cent wealth
tax. ahh. ahhh >> joining us now in a cnbc exclusive by phone is leon cooperman, chairman and ceo of emega omega family office. leon, thank you so much for joining us >> my pleasure thanks for having me i think. >> i want to make sure we get on to market dynamics with your expertise on that. but forgive us for starting on some of this political back and forth and i want to start on the news that mike bloomberg may be considering throwing his hat into the ring. you would support that, would you? >> i would but before i get there, if you wouldn't mind, indulge me for one second, i was in physical therapy this morning, i have a shoulder problem, and i understand the president was asked a question by a reporter about -- suggesting he not run again. that's not really what i said. and what i said on cnbc earlier
this week was, if i was the president -- and of course, i'm not -- if i wasn't prepared to change my dialogue and treatment of people, for example, you know, romney's a jackass, he's a terrific guy, you know, john mccain is a true war hero, he has to be president for the entire country and not just his base. so if i was him, if i wasn't prepared to change -- and i don't think he is prepared to change, for example, he already labeled mike bloomberg, you know, little mike. you know, he's the same size as i am, height wise. he's much thinner than me, which i envy but i would tell the president, take a justifiable victory lap and not run again. you know, the stock market's at a high, he can take credit for that the economy's growing. 5 million jobs have been created in his presidency. we have record high employment, record-low employment for minorities he's taken on a tough trade battle with china. he's focused on discussion of illegal immigration. he reduces red tape and he's
bolstered our national defense so, you know, he's done a good job for the time he's been in office and he should get credit for that but he has to be more presidential and if he's not prepared to do that, i would say, step aside. now -- >> actually, before we get on to bloomberg, forgive me, leon, please, indulge me now >> call me lee all my friends call me lee you're my friend >> thank you, lee. i certainly will but you mentioned the comments that the president made relating to you personally today. it was in response to a question from our eamon javers. let's listen to that quickly now. here's the president talking about you, lee >> good. >> i don't know leon cooperman, but whoever leon cooperman is, i know of him, he can have his own view but in the meantime, i'm making him rich and i'm making a lot of other people rich. everything about our economy is just about the best it's ever been >> lee, did the president lie there? does he know who you are >> well, look, i'm not a major
guy. i'm a little guy he did meet with me. i did have dinner in the white house with him through the offices of a good mutual friend, but he has a lot of things on his mind so he might not remember but we did have dinner in july of 2017 in the white house there was about ten people at the dinner and the president and it was an interesting, good dinner but i don't think he lied. you know, how many meetings does he have? >> sure. >> you can find a lot of things to criticize about him, but not about that >> far enough, lee let's move on. bloomberg, you remember going to say, why would you support him >> i'm not a registered democrat, you've got to understand that. i'm an independent i tend to vote the person and the issues i think mike bloomberg is terrific and i hope the democratic party agrees and gives him the nomination he's a unifier he's been extremely generous with his resources i read somewhere he's given away about $8 billion over the last number of years. most importantly to me, i like
people that are not pretentious. he's never forgot where he came from he understands how the economy works. i remember when politicians in new york city -- i'm not a new york resident. i have a home in new jersey, but i live mainly in florida i remember when politicians in new york city were pushing for a billionaire's tax. he said, if you lose one billionaire, you've lost more revenue than you would have got from everyone else he understands how the system works. and i appreciate that. i'm not particularly close with him, by the way. my view is not based on some sort of deep friendship, but a cold-blooded saem eed assessmens performance as the mayor of new york city. and my understanding of his values, which i relate to. if he changes his stripes, i could reserve the right to change my opinion. at this moment in time, i
appreciate his willingness to put up with all the blaloney you have to put up when running for president. we all have certain skeletons in the closet and i hope he doesn't have any because i think he's terrific and i think he's probably running because he doesn't like what he's hearing from most of the candidates and feels he can make a difference he has a lot of energy and i think he can make a difference that's where i come from. >> lee, you know you mentioned that you see him as a unifier. if bloomberg runs, there's going to be a difficult path to get through the democratic primary, given the fact that the debates have been centered so much around economic inequality, and there's a fear there that if he enters the race, it fractures the voting base. how do you see it? >> my guess is that he's more likely to raise taxes, a rich individual, than a poor individual would raise taxes it's the way you raise taxes my problem with elizabeth warren, to be honest with you, is, i have a criticism and i have a different view, okay?
my criticism is, she's acting like a politician and i use that word "politician," in the most uncomplimentary fashion. why is she attacking and bernie sanders attacking billionaires most billionaires i know work very hard for their money, okay. they didn't hit a lottery, didn't inherit it, and do good things with their money. so i think she's pandering to a base there are obviously more poor people in the country than rich people and it's easier to, you know, criticize wealthy people i don't know of any wealthy people myself included who's not prepared to pay more in taxes. it's how you get there i think 14 countries have tried a wealth tax and 10 dropped it it is totally disruptive it's the wrong approach. every year, you're going to do some kind of evaluation of your net asset value, okay? and you're going to give 2% of your net assets away how are people going to figure out their net worth? take jeff bezos, where probably the vast bulk of all of his
fortune is in amazon stock we have a 37% tax rate at the federal level. get rid of the carried interest, get rid of the 1031 tax deferral there are so many things we could do raise the tax rate weapon don't need -- the irs has been promising us simplificat n simplifications for the last 50 years or longer. 76%. ever since i started paying taxes, i recall, it was going to get simpler. it's gotten more and more complicated. i don't even read my taxes anymore. that's a different issue i criticize her for her style. she couldn't, you know, mock me, make fun of me that's fine, i don't care. i know what i stand for and done and i know i've lived the american dream, by the way and i'm very focused on helping others live the american dream my wife and i, my family, we send 500 kids to college in newark, new jersey, we pay our tuition, have done other things and look around the city of new york and what do i see, i see
names of flaphilanthropists on hospitals. my favorite is ken langone he's really helped change nyu. so i don't think -- i don't understand why she and sanders find a need to criticize billionaires and as far as mike is concerns, they'll take a billionaire to probably raise taxes on other people and i believe, by the way, in the progressive income tax structure. i believe rich people should pay more in taxes. and with the right numbers, i don't know, as i speak to you on the phone, i look at a quote here from a gentlemen, since this is an area where many people are concerned about fairness and social justice, what is your share of what someone else has worked for? that's the question. i'll ask the three of you. i don't know what you make for a living, but i know you work hard and you're very conscientiousness. how many months a year do you want to work for yourself and for the government i've said publicly, i'll be willing to work six months for the government, six for myself how many months do you want to work for yourself and how many do you want to work for the government >> i agree lee, i think that feels about
right, 50% for people fortunate like yourself and like me. i guess, one follow-up nuanced question, forgive me, and we can go back to the bigger picture question do you support the elimination of the tax-free step up in the basis or not is that an area that you do think there is perhaps some reasonable criticism sorry, go on >> i have no problem with the inheritance tax. i guess you could say i'm biased, because i took the giving pledge nine years ago and i told warren buffett that asking for half wasn't asking for enough my intention was to give it all away i plan to give away all my money. but i haven't focused on that aspect of it i have focused on carried interest, which is to eliminate. i focus on 1031, which gives these real estate billionaires the ability to roll over tax deferred forever, capital gains in their real estate they should get rid of that. and i have no problem raising the marginal tax rate. so i haven't focused on that one
particular question. i've always felt long-term capital gains in part stem from inflation, so tax inflation is wrong. but let's come up with a number. >> leon, lee, i totally get with you, and what i also wholeheartedly agree with is that in all of these interviews, in all of these comments, your letter to senator warren, you outline many, many ways in which you're willing to pay more tax and that's never, of course, the focus of hr responer responses >> and she mocked me before, i broke down when i talk about family and doing the right thing for the country, and she makes fun of me. but the reality is -- >> i guess, lee, the one point i just -- and this is a minor point relative to all of the wider, very legitimate points you made, but a wealth tax, of course, focuses on accumulated wealth to date and you and i both know, as you highlighted with jeff bezos, as an example, how impractical, almost impossible it would be to enforce that
i guess the -- >> it's also wrong it's also wrong. >> someone would push back and say the step up basis does then allow that accumulation of wealth never to be taxed >> i haven't focused on that what i have focused on is the currently laws says 37% -- hello, did i lose you? >> no, no. we're still here we're still here >> what i'm focusing on is 37% of your income goes to federal government depending which state you live in, anywhere from say 8 to 14% goes to the government then you've got a fica tax of 6.5% then a medicare tax of 90 basis points without any limitation, then you have the 3.6%, i think, tax, obamacare tax on dividends and interest you know, let us decide what the maximum tax rate should be on wealthy people the wealthy people in this country pay the majority of the taxes. as it should be. let's decide as a nation what should the maximum tax rate be on wealthy people and that will define the revenue yield to the
government and the government decides the activity to that revenue yield, okay and that's kind of simple. we don't need a wealth tax it can be totally disruptive just think about it. i assume the way it would work is every individual that's wealthy will have to do an attestation, sign an affidavit which what they say here is truthful and honest. how many people are going to go out and buy gold and stick nit a safety deposit box it's a misallocation of resources. it's not the right thing we don't want jeff bezos to sell amazon stock every year if he doesn't have to sell stock or he doesn't think a stock should be sold let's get the tax rate to where it should be we have to help poor people. we have plenty of wood to chop and plenty of things to do but we can do it in a better way i get back to what i said. she is totally off-base by this constantly criticism of wealthy people the wealthy people i know, david reubenstein, ken langone, bernie
marcus, mike bloomberg, these are all philanthropists with a capital "p." i'm a philanthropist with a small "p." i'm flattered you even want to talk to me i'm not overly relevant but i have an opinion and i'm willing to express that opinion. and i think she's on the wrong track, and she's on the wrong track because she wants us to appeal to a base and i will bet you a dollar right now, i'll bet you a dollar right now that the average person on the street has no idea what percent of the income the wealthy people pay in taxes. they think they get away with paying nothing it's baloney just like i read google did a survey after brexit and they said the average british person did not understand what brexit was all about, but they voted for brexit, okay >> yeah. >> you know, we have to improve economic literacy. we have to have justice and fairness in the tax system get rid of the loopholes we don't need a wealth tax it's a joke and it's not going to work. and i haven't even said all along. the people aif read said it's unconstitutional but i'm sure she'll find some
cockamamy attorney to tell her that it's not. >> lee, in the midst of this conversation we're having and sort of going back to something you mentioned before, i wonder if you think the concept of the american dream is in jeopardy right now? it's such a long-held fundamental, societal value, but it seems to be very much in question and under siege is that how you see it >> it is but, you know, it exists in asia you know, all the billionaires are emerging there hopefully we don't lose that in america. the country is moving slightly to the left. i think it's basically because of income disparity. and my answer to income disparity is basically a fairer tax structure, i agree with that but it's more economic growth and education. education is key we got to educate the youngsters so they can be competitive in the economy that we live in. simple as that >> lee, one quick final question we know your view on what the
stock market might do if elizabeth warren became president. as we stand here today, given that the election is a year away and that it could go either way, do you think the s&p 500 is a sell, particularly as it sits as a record high? >> no. not really i've been saying consistently, i think i was recently on with scott wapner, that the conditions that normally occur at a market top, you know, recession, accelerating inflation, hostile fed, you know, unforeseen geopolitical event, the last one, of course, you can't forecast, but we don't have signs of recession, inflation, if anything, they're trying to get it up. the fed in my opinion is more than accommodative they just create an environment where it's free money and this is, you know, aiding and abetting the speculative activity and i don't think it's going to change anytime soon. i would say, so, i think the market is okay beyond for year, i would say i have more conservative view, somewhat concern there's nobody talking about the
debt buildup in the country. republicans, democrats and we're creating debt at an alarming rate. and that's a factor. second is the shift to the left, you know i mean, i will tell you, by the way -- if elizabeth thinks i'm prejudiced against her, i'm not. bernie marcus -- excuse me, if bernie sanders was elected, it would go down to # th25%, maybe more i'm very worried about the market structure i've talked about this previously when i came to wall street 51 years ago, the volcker rule didn't exist and brokers traded stock for 50 cents a share broker's commission is largely gone and the volcker rule exists, so the brokers are no longer stabilizing forces. and secondly, when i came to wall street, the new york stock exchange handled 80 to 90% of the volume today 80% of the volume is off the board. so the specialist community don't have to stabilize. and finally, you've got the elimination of the uptick rule, which gave rise to a lot of these quantitative trading systems that don't need an
uptick to go short and they buy strength, they sell weakness so things get exaggerated in both directions. in the fourth quarter last year, you had the worst quarter since the great depression on virtually no economic justification. it was just absence of liquidity in the market, hedge fund liquidation, tax loss, that. so i think the market is okay at fre the present time i don't understand why the fed is so aggressive nin cutting rates. consumer net worth is at a record level the economy is growing at trend. corporate profits are decent stock repurchase activity would suggest that business sentiment is good, not bad the rates are already very low we're really tagging the savers. if you take the interest rates and adjust for taxes, there's no return on savingsavings, which everybody out on the risk curve. that will change one day, but not this year. >> lee, thanks so much we'll have to leave it there and allow you to get off to your weekend. have a wonderful weekend and thank you for your time and your candor, as always. >> my pleasure, thank.
>> we'll speak to you soon, lee. lee cooperman, chairman and ceo. guys, i mean, mike, clearly, a relatively bullish three to six-month view on the market, which perhaps we could come back to, but continuing this debate, and a theme that tii think is important to highlight, a lot of these wealthy people that have been on our air, almost all of them do come out and say, i'm willing to pay more tax. it's not the line that gets picked out of the interview or picked out of the commentary by certain politicians, but that is the overarching theme from mr. cooperman. >> yes although there has been a movement for decades to actually reduce the actual effective tax rate of people at the upper end. so, you know, we're -- it's not been politically feasible to do that and i think it's just politically very expedient to talk about a wealth tax, even if you don't think it will ever happen >> and in this day and age with twitter and the way things work, in an election campaign, you can understand both sides add some
spin and emphasis in the direction that helps them. two former twitter employees charged with spying this week for saudi arabia we'll tell you the social media platform they used to target information. longel iba aer this bl"s ckft hat does the word "partner" really mean? someone i can trust. (impact, click) who is with me for the long-term. who understands i'm dealing with lives, not only livelihoods. that in order to help people, i need more than products, i need quality support and insights. can i find someone who partners with me to achieve people's long-term success? with capital group, i can. talk to your advisor or consultant for investment risks and information. rather than worry about how to pay for long-term care. brighthouse smartcare℠ is a hybrid life insurance and long-term care product. it protects your family while providing long-term care coverage, should you need it.
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outlining a 90-day plan to turn around the struggling companies. it includes plans to divest all non-core businesses and reduce head count there's a certain slide that outlines the evolution from pre pre-2017, founder-led, partially focused to the last few years calling them distracted and a decentralized business model to what founder clooure will focuso going forward. now, this comes on the heels of an email that clure sent last night to employees we saw it here at cnbc, emphasizing that the business is secure and saying that he will outline a five-year strategic plan to the board on november 19th back to you. >> okay, d., thanks so much for that still ahead here on "closing bell," saudi spies and social media. two former twitter employees charged earlier this week with spying for saudi arabia, but it ieons out the main hot spot for sps a completely different platform we'll explain, when we return. ♪
bear, i don't think investors are quite taunting the bear. look at the bull/bear indicator from bank of america/merrill lynch. this is supposed to measure an indicator of sentiment and positioning by hedge funds and all of those things that tell you what the risk appetite of a market is. and it does tell you people are very despondent and positioned very defensively back in the summer you're barely up to neutral levels this is a net bullish signal that basically says, people are not fully committed to this rally just yet and it's the reason why this firm, michael hartnett over there is essentially saying, we're going to overshoot to the upside he thinks by 3,300 >> mike, thank you very much for that now, two former twitter employees charged earlier this week with spying for saudi arabia, but it turns out the main hot spot for spies is on a completely different platform. >> yeah, wilfred, this is a little bit surprising after that story broke. i called a bunch of former and
current u.s. law enforcement officials who told me one of the areas that they watched the most on social media is linkedin. we think of linkedin as a more boring than twitter place where you post your resume and network for a new job. but actually, they say, because of the nature of the personal and professional information that people are putting up on linkedin, it's a real honey pot for spies to go after all kinds of information about companies and governments. i talked to linkedin about this, too. they say they're aware of the spying problem on linkedin they've been working on it for years, they say. take a look at some of the numbers, including this one. more than 20 million, they say, fake accounts were taken down by linkedin from january to june of this year. they say a lot of those, they were able to take down while they were still registering the accounts so people couldn't impersonate other people on the site they say 2 million of those accounts were taken down before the members even ultimately complained about them. 67,000 accounts were taken down
after members complained so they're saying, they are getting a lot of these before they even have a member notice that there's a fake account out there. also, 24 is the number of apparently fake russian nation state actor accounts that the company restricted back in 2018. they say they were able to crack down on those, which were spreading disinformation on the linkedin platform. in a statement from linkedin, they said, we actively seek out signs of state-sponsored activity on the platform and quickly take action against bad actors in order to protect our members. i talked to a current u.s. law enforcement official who told me that they have a good relationship with linkedin they say that the company is very good at working with the u.s. government to try to root out as much as this as possible, but there's a lot of it going on, wilfred. >> there is, eamon, and i would point people to your full write-up of this fascinating story on cnbc.com. eamon, thank you >> thank you up next, it's musk versus
einhorn. the tesla ceo taking another shot at the greenlight capital founder and einhorn isn't back dou ing down the latest on their feud, ahead. he wanted someone super quiet. yeah, and he wanted someone to help out with chores. so, we got jean-pierre. but one thing we could both agree on was getting geico to help with renters insurance. ♪ yeah, geico did make it easy to switch and save. ♪ oh no. there's a wall there now. that's too bad. visit geico.com and see how easy saving on renters insurance can be.
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stage again today. musk tweeting a letter to einhorn saying that his latest quarterly litter was rife with, quote, false allegations against tesla. musk said einhorn was only making those to save face with his investors after tesla's successful third quarter einhorn fired back, noting that they both struggled last year, but that a big difference was that his firm, greenlight, had generatedreal profits for thei investors since they began in '96. einhorn said that his tesla short hasn't performed badly, although that stock has soared 40% over the last month, guys. >> not badly overall but not well in the last month or so. >> not a good month for tesla short sellers. that's for sure. >> leslie. thank you. up next on "closing bell" we drill down on oil. mike will head to the telestrator with a deep dive on energy stocks.
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>> can you buy the oil and gas exploration etf? this is over two years obviously it's not been a great story for any of this. but crude clearly outperformed the exploration stocks in particular very cleardown trend i think this is part of the lesson of being a deep value investor you have to buy stuff where the negative case is very prominent. the negative case here being a lid on the commodity prices probably because of all the supply they are not producing great cash flows right now maybe there is a long-term secular threat to fossil fuels all the rest but they are looking cheap and washed out for the nerve. >> i'm summons the nerve to say you are going with the dare devil risk take willing theme. >> the theme absolutely the border line between healthiy risk taking and recklessness, that's the theme. >> thank you very much. up next we break down the key things every investor needs to watch heading into a fresh adg ektrinwe at record highs, when we come back.
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dee. maybe we've lost dee there >> which will of that time of the year again alibaba shopping extravaganza bigger than black friday and cybermonday combined kicking off monday with a taylor swift concert. singles day last year brought in $30 billion in sales for alibaba. this year the number expected to get bigger and see more participation from u.s. reretailers this year's holiday comes at a pivot almoment jack ma stepped down in september and the company is looking to race up to $15 billion through the hong kong listing as early as this month back to you. >> deedra thank you. cramer huss a big show tonight on "mad money." >> amazing show. we got to keep it going. and we will drop at the u.s. air force academy at 6:00. >> jim cramer salute to service. a very special veterans day
edition of "mad money" starting tonight at 6:00 p.m. eastern mike, final thoughts record closes of course for all three of the indices one snap shot we didn't discuss earlier, worst performance around the week. nikkei s&p up less than 2% zbloop a feature for a while since the august lows the rest of the world outperforming the u.s. the rest of the people looking at that dynamic that's more more pfgt than negative because it's more about the potential recovery in the global economy as opposed to people hiding in the u.s. markets it's the cyclical trade animating u.s. stocks as well. >> as we start to have fewer earnings reports now. >> yeah. >> we have broken the back of earning season comfortable is that a worry for the market or a positive. >> i think it's been a positive. the reactions have been positive it leaves the market in the realm of subject to some of the headlines but also just to how far is this rally coming in a short period of time the sentiment may get too busy
you have seen the market slowdown and flatten out in the last few days. that may be a breather >> "fast money" is next. and then jim's veteran's day special of course, "mad money" at 6:00 p.m. we are out of time have a great weekend. thanks for watching "closing bell." >> "fast money" begins right now. live from the nasdaq market site overlook new york city times square this is "fast money. i'm mella lee. our traders on the desk steve grasso brian kelly pb dan nathan and guy adami. tonight lion gate vice chairman michael burns breaks down the company and streaming wars a big week for bonds and the chart master has one chart that he says could be a perfect buying opportunity and later we'll reveal today's mystery chart down more than 4% this week. hmm? bk has hope for it yet we'll find out why he is optimistic but beginning with earning season things may wind down but for retail heatin